An update on the storm: what we’re doing to protect prices and prevent this from happening again

The unprecedented winter storm in Texas caused huge disruptions to the energy market. The cost of power in the wholesale market — where electricity is bought and sold before being delivered to end consumers — spiked from about $50 per megawatt-hour to $9,000. This is the highest amount ERCOT allows. Bills skyrocketed for many customers around the state.

Our members remain our priority

Bulb protected members from price spikes and took immediate action to reduce the demand on the power grid and prevent additional outages. We shared clear guidance on how to make the biggest impact, like urging members to set the thermostat at 68 degrees and keep the heating down (or off) during the highest usage times.

We also offered to pay our members $2 for every kilowatt-hour of energy they saved on Monday, February 15 compared to Sunday February 14, up to $200.

Energy companies are facing unreasonable extra charges

At the worst point of the storm, over 52 gigawatts of Texas’s 108 gigawatt of installed capacity were offline. Electric providers are now facing hugely overestimated charges that don’t make sense. And while Bulb won’t pass costs from the storm on to members, these charges could have a negative effect on many other people across the state, some of whom are already facing soaring energy bills. This isn’t right or fair.

Generators across the state were affected and gas-fired plants shut off due to freezing conditions. All of this caused an enormous surge in what are called ‘ancillary charges’. These are financial incentives paid by electric providers to generators to encourage extra generation when it’s needed.

Like many other companies, Bulb is being asked to pay unreasonable ancillary charges — hugely overestimated charges that don’t make sense. To give you an idea of how much these charges increased by, what we mean by ‘unreasonable’ charges, take a look at the graph below. That spike at the end shows the increase in our ancillary charges.

These unreasonable charges have led to generators making absurd profits: reportedly up to $50 billion in one week. While many Texans are suffering and facing crippling energy bills, the energy generators are reaping the rewards. And that isn’t right.

We want to understand what’s being done to fix the market to ensure generators aren’t profiting excessively from this emergency and Texans aren’t left without power ever again.

And we don’t want to pass on price increases to customers. We don’t think it’s fair for customers to pay more. We think the system needs to change.

Preventing this from happening again

We’ve filed a petition to the Public Utility Commission in Texas (PUCT) — they’re the agency that regulates the state’s electric, water and telecommunication utilities and provides legislation. We’re urging them to address the high charges and help us, and our customers. We’ve also asked Governor Abbott to take urgent action — we need the state to make the system better and avoid more damage to the market and the public. You can read our letter to the governor below.

As Texans begin what will likely be a very long recovery process, many are asking how this could happen in the state that produces the largest share of electricity in the country.

There are no easy answers. And climate change may mean we see more of these surprising weather events. But we can work to be better prepared — and that starts with fixing the problem and prioritizing fairness in the market.

We want to continue providing people in Texas with affordable, renewable energy. And we want to be part of an energy system that’s fair — and that’s proven to be a big issue that needs fixing, fast.

What we said in our letter to the governor

Dear Governor Abbott,

I’m the General Manager for Bulb Energy here in Texas. Bulb is a global company which launched in the UK in 2015 and now provides affordable energy to over 1.7 million homes worldwide. We’ve just been named the fastest growing company in Europe and are already growing faster here than we were in the UK at the same time.

February’s tragic winter storm caused huge disruptions to Texans across the state. They suffered freezing temperatures, blackouts and — in some cases — skyrocketing energy bills.

I’m writing to urge you to take immediate action to avoid irreparable harm to the Texas electric market, its participants, and the public.

While many Texans are suffering and facing crippling energy bills, the energy generators who failed these customers are reaping the rewards. During the storm, over 52 gigawatts of Texas’s 108 GW of installed capacity were offline at the worst point. Generators across the state were affected. Gas-fired plants shut off due to freezing conditions, causing a surge in overestimated ‘ancillary charges’ which are financial incentives paid by electric providers to encourage additional generation when it’s needed. This has led to generators making absurd profits, reported up to $50 billion in one week, and to a transfer of wealth from hard-working Texans to large corporate generators.

We’re standing up for Texans. We don’t think it’s right or fair that providers pay these exorbitant ancillary charges to generators much of which will end up coming out of the pockets of Texans. And while Bulb won’t pass on costs from the storm to our customers, these charges could have a negative effect on many other Texans across the state, some of whom are already facing soaring energy bills. Things have to change. And that’s why we’re filing a petition to the PUCT.

We want to understand what’s being done to fix the market to ensure generators aren’t profiting excessively from this emergency and Texans aren’t left without power ever again.

During the winter storm, Bulb protected members from price spikes and took immediate actions to reduce the demand on the Texas power grid. Unlike other companies, we kept our members’ rates locked through February and even offered to pay our members $2 for every kilowatt-hour of energy they saved on Monday, February 15, compared to Sunday, February 14, up to $200.

We’re proud to do business in Texas. And we think that a deregulated market with choice is better for Texans. We hope to be a part of the solution that ensures the Texas electric market is efficient, innovative, and provides affordable, renewable energy to Texans.

Best,
Vinnie Campo
General Manager, Bulb U.S.